Public Benefit Corporations

[mu_enrico]

Corporations are always profit-seeking in nature, some that claim "sustainable" or "green" are just simply marketing effort to make it look good.
Profit-seeking will lead to efficient corporations. However, businesses always generate externalities. Thus, as long as externalities are lower than compensations (i.e. taxes, CSR, etc.), it is safe to assume that the corporations have benefited the community.

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[Mometaskers]

If only these would be more common. I've checked and it seems it's mostly US, Australia and Canada that have these companies. If they'd be successful then that can inspire more entrepreneurs to register their businesses as PBC.

If the shareholders are philantrophists anyway, they probably wouldn't mind just getting small dividends. I think the big benefit compared to non-profit NGOs is that PBCs should be able to sustain themselves rather than relying on charity.

[Ranly123]

Do you believe they are important to build a sustainable economy? Yes? No? Why?

There is no such thing as zero-profit or profit-only businesses, but everyone tries to make gains using glamorous slogans such as community development, renewable resources, the ozone layer, and other things.
Cooperative companies create for benefit and benefit.
I believe that the personal motivations towards issues we are experiencing are stronger than the companies' offers or innovative ideas.

I also believe that there is no zero profit institute or companies. They should also benefit from the services they offered likewise their customers benefited from them. Saying they have zero profit is just a propaganda to lure customers on their services if there is.

[Lucusfoundation]

Corporations are always profit-seeking in nature, some that claim "sustainable" or "green" are just simply marketing effort to make it look good.
Profit-seeking will lead to efficient corporations. However, businesses always generate externalities. Thus, as long as externalities are lower than compensations (i.e. taxes, CSR, etc.), it is safe to assume that the corporations have benefited the community.

Thanks Mu_Enrico for your reply!

It's hard to consider what corporations have benefited the community by paying their taxes.

An agriculture company that uses toxics to take care of their plantations, giving jobs to the community but creating terrible long term health issues. Are they benefiting the community? What is more important? The jobs or the long term's population health?

Same with oil companies, mining companies, etc.

If only these would be more common. I've checked and it seems it's mostly US, Australia and Canada that have these companies. If they'd be successful then that can inspire more entrepreneurs to register their businesses as PBC.

If the shareholders are philantrophists anyway, they probably wouldn't mind just getting small dividends. I think the big benefit compared to non-profit NGOs is that PBCs should be able to sustain themselves rather than relying on charity.

Thanks Mometaskers for the reply.
It would be wonderful for more companies like these to exist, indeed. This would mean that we have a capitalism where profit is as important as positive social and environmental impact. Humans shouldn't design economies without thinking the issues that their operations can create. In order to think in long term, we need to think on what the impact of decisions and operations is.

Do you believe they are important to build a sustainable economy? Yes? No? Why?

There is no such thing as zero-profit or profit-only businesses, but everyone tries to make gains using glamorous slogans such as community development, renewable resources, the ozone layer, and other things.
Cooperative companies create for benefit and benefit.
I believe that the personal motivations towards issues we are experiencing are stronger than the companies' offers or innovative ideas.

I also believe that there is no zero profit institute or companies. They should also benefit from the services they offered likewise their customers benefited from them. Saying they have zero profit is just a propaganda to lure customers on their services if there is.

Thanks Ranly123 for the reply.
It's very logic and we agree with you. Zero profit companies don't exist.

[Theb]

I don't know if all countries have a "public benefit" requirement for their country but I know our laws are strict enough that on either way the rest of the citizens gets to benefit something out from both domestic and foreign corporations running in their country. For example taxes are set which in now way they can escape without paying, having corporations will also produce job availability for that country which would boost the economy, and of course if they do want to get less taxes corporations usually donate money in form of charity in order to lessen their burden.

Aside from the economical standpoint there are also laws that limit on what they can do and also require them on what they should do. For instance some countries require car manufacturers to have their cars at a EURO 4/5 standard which is good standard if you want the cars running in your country with less emissions.

[cizatext]

Yes public benefit corporation is a good way of having a double development platform in this way the economy get developed and also the environment where the company operates get developed also and any corporation who don't comply to this get a legal suit.

[el kaka22]

There are similar websites in almost any country but the money is not there for those places. Usa and Canada and even UK could do this because the people who live there have enough money to cover for someone else expenses for a while or pay places like kickstarted to get together and allow them to make new stuff because the economy is not as bad as other countries.

USA is not doing that well economically in macro sense but if you look at how much people are making they are still ahead of many countries. That is why when you look at a third world country or even a not high end first world country people are barely living themselves so its hard for them to spend 20 bucks on some game that may or may not come out in 2 years. Don't get me wrong they all exist in all countries but its just not popular like it is in USA.

[Lucusfoundation]

I don't know if all countries have a "public benefit" requirement for their country but I know our laws are strict enough that on either way the rest of the citizens gets to benefit something out from both domestic and foreign corporations running in their country. For example taxes are set which in now way they can escape without paying, having corporations will also produce job availability for that country which would boost the economy, and of course if they do want to get less taxes corporations usually donate money in form of charity in order to lessen their burden.

Aside from the economical standpoint there are also laws that limit on what they can do and also require them on what they should do. For instance some countries require car manufacturers to have their cars at a EURO 4/5 standard which is good standard if you want the cars running in your country with less emissions.

Thats understood and agreed Theb, companies pay taxes and they are, lets say, "indirectly helping".

But a mining company, that is destroying an entire region naturewise and an entire population by polluting their resources, even if they pay taxes, are they really helping?

Balances need to be made... Are they destroying more than helping?

[exstasie]

It would be wonderful for more companies like these to exist, indeed. This would mean that we have a capitalism where profit is as important as positive social and environmental impact. Humans shouldn't design economies without thinking the issues that their operations can create. In order to think in long term, we need to think on what the impact of decisions and operations is.

One problem is public benefit corporations are only a small piece of the corporate landscape. We're talking about institutions like colleges and hospitals that have a clear community or society-driven mission.

You'll always see the occasional philanthropist (or government authority) who wants to throw money at public benefits, but I don't see how we could upend capitalism and make the entire system purpose-based. Most industries are purely driven by profit motive and I don't see any way around that. Rationally, why would most capitalists want to give away their profits to public benefit missions?

The only way is to use tax incentives and things like that to encourage this behavior from private capital. That's usually a dead end because corporations and legislators work together to create loopholes that keep the profit motive and large shareholder dividends intact.

You can't just expect the hyper rich to give away their riches. Most rich people don't operate that way.

[Lucusfoundation]

It would be wonderful for more companies like these to exist, indeed. This would mean that we have a capitalism where profit is as important as positive social and environmental impact. Humans shouldn't design economies without thinking the issues that their operations can create. In order to think in long term, we need to think on what the impact of decisions and operations is.

One problem is public benefit corporations are only a small piece of the corporate landscape. We're talking about institutions like colleges and hospitals that have a clear community or society-driven mission.

You'll always see the occasional philanthropist (or government authority) who wants to throw money at public benefits, but I don't see how we could upend capitalism and make the entire system purpose-based. Most industries are purely driven by profit motive and I don't see any way around that. Rationally, why would most capitalists want to give away their profits to public benefit missions?

The only way is to use tax incentives and things like that to encourage this behavior from private capital. That's usually a dead end because corporations and legislators work together to create loopholes that keep the profit motive and large shareholder dividends intact.

You can't just expect the hyper rich to give away their riches. Most rich people don't operate that way.

Well, maybe because just having money doesn't make you happy. And helping humankind and the environment does.
That's the whole point.

People can go from poor to rich and from rich to poor in matter of seconds. Money comes and goes.

But the satisfaction you get when creating real change, that's priceless, and that's the mindset we believe is needed to address our current and future problems.

What do you think?

[sclmte]

much of what is happening to such a benefit to public corporations is often profitable but im not really sure to earn huge profits, that's because usually in open operation I can not say it legit, because most of the people who are going to get the benefit are public means to me it is worthless and at times most of those who are in public benefit earn, but not much.

[deisik]

I think it has been still about profit with the shareholders. The traditional corporations were built to have maximized profits and also dependent on what the government stated/signed in that public benefit. It has always been to seek profits whether it's private or public entities

Support this view

Besides, all this bullshit about public benefit, social responsibility, flashy philanthropy is used exclusively to cover the ruthless nature of capitalism (but socialism is not much better, just in case) as in today's world it is not considered a good thing to go for profits only. It is the same with creating foundations by extremely wealthy people (think Bill Gates here) which are often created to avoid heavy taxes on inheritance, for example

[merchantofzeny]

Thanks Merchantofzeny for the reply.
It's sad or weird, you put the name, but Public Benefit Corporations get no type of special benefit. They stand under the same regulations and taxations as normal C-corps, with the only difference that they have impact purposes at the core of their business which they need to attend. This is not a minor detail as if normal C-Corps took this kind of approach, they could get sued by stakeholders for going against the for profit purposes.

The incentive for investors is nothing more than create a more sustainable value and bring real benefits to future generations and the environment. What is money for if to be spent in ethic, money making but also impact creating businesses? There's a whole movement of for purpose/philanthropic/impact investors movement.
People are tired of just having money, they want to create real change in the world. It's the ultimate way to feel like you're actually doing something for humanity.

Let's not even talk about the new generations starting from Millenials!

I believe in outcome rather than intention. I don't care if people are greedy as as long as their actions benefit society as a whole. We can't always rely on people being philanthropic. I'm not sure what would be the best way to encourage people to get into these PBCs but there should be some sort of incentives.

[TheCoinGrabber]

Thanks TheCoinGrabber for your answer.
Yes, sued indeed. The same way a normal C-Corp can get sued if they start misusing the money, which is not good according to for profit purposes.
The PBCs have a great PRO, the intrinsic value they provide to their customers and partners.
But they have a downside; they need to attend for profit and for purpose goals.

Yeah, figured it would probably not be easy to accomplish both at the same time. Are the guidelines for the "social purpose" goals usually clear enough? Coz with profits, it's very easy to see if the company is making enough for the stockholders and still have plently left for operations and wages.

But what if you have a mission statement like  “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis," like Patagonia? I suppose every company is required to follow certain environmental guidelines but how would they measure that Patagonia is "implementing solutions to the environmental crisis"?

[deisik]

But what if you have a mission statement like  “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis," like Patagonia? I suppose every company is required to follow certain environmental guidelines but how would they measure that Patagonia is "implementing solutions to the environmental crisis"?

I think the solution already exists

As you seem to refer to quantitative measures, the "solutions to the environmental crisis" can be assessed pretty easily. Almost every mass production out there causes some damage to the environment, but it is not some abstract damage but very specific one depending on the type of production, like CO2 emissions (aka greenhouse gases). And these can be quantified, so if a certain company reduces them, it can be said that it produces cleaner products with less damage to the environment

[Mometaskers]

Thanks Mometaskers for the reply.
It would be wonderful for more companies like these to exist, indeed. This would mean that we have a capitalism where profit is as important as positive social and environmental impact. Humans shouldn't design economies without thinking the issues that their operations can create. In order to think in long term, we need to think on what the impact of decisions and operations is.

If the government will not give PBCs some sort of advantage compared to other corporation types, the only ones that can encourage more PBCs would be us consumers. If they see that peopel might be willing to pay extra for products if the manufacturer is a PBC, then they might choose to incorporate as such. At the very least, the other non-PBC corps might take the hint and start acting more responsibly.

[rika0223]

I think it has been still about profit with the shareholders. The traditional corporations were built to have maximized profits and also dependent on what the government stated/signed in that public benefit. It has always been to seek profits whether it's private or public entities.

I think they are essential to the economy on the fact that it serves the public and benefitted by the public. Additional work can also be generated, employing those who don't have a job.

it is possible for all of them to advance all aspects of the economy in the progress and development of the era and technology which of course also requires an increasingly advanced economic development as well

[finaleshot2016]

I think it's absolutely normal for any company to seek for profits as high as possible because thats in the first place why most people open businesses, but in the same time also aim to help the environment to grow and modernize. Also this kind of companies need to create as many work places as possible to make sure they are helping the community even more while their profits grow.

I agree, another reason why corporations widen their perspective and being innovative to gain more profit than the normal profit they're gaining. Some corporations are the one who destroys our environment because of industrial factories but some are pro-environment, I think it's more beneficial if their corporation has a project about building our environment.

One of the example here is, our bay here in my country was full of trash but because of the people and some sponsored corporate, they help to clean the bay. I really like corporation who has a lot of projects and wanted to grow profit but didn't forget our mother nature.

[mu_enrico]

An agriculture company that uses toxics to take care of their plantations, giving jobs to the community but creating terrible long term health issues. Are they benefiting the community? What is more important? The jobs or the long term's population health?

Same with oil companies, mining companies, etc.

But a mining company, that is destroying an entire region naturewise and an entire population by polluting their resources, even if they pay taxes, are they really helping?

Balances need to be made... Are they destroying more than helping?

I believe regulations already cover most of these issues. Regulations are in place to control externalities, e.g., taxes, CSRs, rehabilitation. Thus, if you heard about nasty corporations, the problem is always about corrupt government (not about regulations).

If companies breach the law, the good government will surely punish them: fine, put CEOs to jail, revoke licenses, etc.

The idea of "Green corporation" is equally bad since it's not efficient and most of the time is just a marketing strategy.

[deisik]

I believe regulations already cover most of these issues. Regulations are in place to control externalities, e.g., taxes, CSRs, rehabilitation. Thus, if you heard about nasty corporations, the problem is always about corrupt government (not about regulations).

If companies breach the law, the good government will surely punish them: fine, put CEOs to jail, revoke licenses, etc.

The idea of "Green corporation" is equally bad since it's not efficient and most of the time is just a marketing strategy

I agree with every word said

And especially with the corruption part as in most cases it is not about regulations at all. These issues (pollution, etc) have been properly studied during the last few decades (indeed, there are still open questions like global warming) and regulations are already in place as the long-term consequences of environmental damage have been revealed (or have revealed themselves)

So it is not about regulations as such but rather about making corporations follow them. And this is where things may get nasty as some corporations can be more equal than others